You are here: Home » Economy & Policy » News
India signs pact to check DTAA abuse
icon-arrow-left
Business Standard

Stressed assets to be made national assets

Banks need assistance to complete projects that they have taken over

Topics
Ntpc

Shreya Jai  |  New Delhi 



Data from Uday website show reduction of 4.03 percentage points in aggregate technical and commercial losses in three months as on December 31, 2016. This suggests government may have already achieved its 2018-19 target of reducing losses to 15%
Lack of power demand has hit most of the projects

In a concentrated effort to bail out beleaguered thermal power projects, the Centre is designing a new plan along with banks and the state-owned . For stressed power-generating assets which a bank agrees to take over, has offered to operate them, Power Minister Piyush Goyal told reporters after a daylong meeting with leading bankers.

Banks need assistance to complete projects that they have taken over, the minister of state for coal, power, mines, new & renewable energy said, adding, “We are focused on finding solutions to make stressed assets into national assets.”

While the government has tried to assist thermal projects with a new coal linkage policy, it will step up its efforts by offering last-mile equity to some projects. The policy would also cover the projects which are old and are planning to retrofit to meet the current environmental norms.

About 25,000-Mw capacity in thermal power is on sale, Business Standard reported recently. But as finding buyers is posing a challenge, most promoter companies of the projects — some operational and others still under development — want to exit to lighten their debt.

In some cases, the companies are undergoing asset restructuring, while others are at various levels of the Reserve Bank of India’s S4A scheme, for restructuring of stressed assets, an institutional financier said.

Sources said the projects in question are “ready to be fired up” but no state power distribution company was floating tenders for additional power procurement. To add to the woes, banks are concerned about non-performing assets (NPAs) increasing.

Lack of power demand has hit most of the projects. Experts said till the end of 2022, new private investment was unlikely. Demand projection has not been in line with capacity addition, leaving close to 60,000 Mw of under-construction projects looking at a bleak future. Recently, the sector’s key financier, Power Finance Corporation, reported losses for the first time as its NPAs rose 300 per cent.


Subscribe to Business Standard Premium

Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!

Insightful news, sharp views, newsletters, e-paper, and more! Unlock incisive commentary only on Business Standard.

Download the Business Standard App for latest Business News and Market News .

First Published: Thu, June 08 2017. 00:06 IST

RECOMMENDED FOR YOU

.